1. Technical Field of the Invention
The present invention relates in general to reviewing medical related bills. In particular, the present invention relates to a method and business technique for reviewing medical service provider bills, re-calculating the same and providing a payment recommendation for the bills.
2. Description of Related Art
In the United States today, health care charges are skyrocketing. The days of a single family practice doctor or nurse typing medical bills for services rendered are gone. Even small offices and clinics have all changed to computer billing. In large clinics and hospitals, the billing departments are virtually (if not entirely) separate from the actual process of doctors and nurses providing medical care. The people working in billing departments may have no medical backgrounds and are mainly concerned with generating bills for medical services and collecting money for the same. The bills sent out by the billing department can be complicated. Often the billing department personnel cannot provide a proper explanation for the charges since the procedure codes used in the bills are created by others (e.g. the medical records department or medical staff where the services are rendered) and the charges for the services and items provided are generated from multiple sources (check-off sheets, swiped bar codes on supplies, pharmacy dispensing records, automated rules, etc.). The medical bills are not designed for a patient to understand and there is no system set up to make it convenient for a patient to ask questions, get information or even have someone adjust errors in a medical bill.
Most hospitals and other health care facilities, such as ambulatory surgical centers (ASCs), charge patients for medical services and supplies when they are ordered, not when they are received by the patient. If a doctor's order changes and the services/or supplies are not used by the patient, the charges may remain on the bill in error. Many hospitals and other facilities charge a standard list of services and items based on the procedure performed (e.g. a simple emergency visit), a daily rate (e.g. what is being used in one day in an intensive care unit), or some other similar unit of service regardless of what items or services were actually provided. (commonly called procedure-based charging, per-diem based charging, surgery cart-based charging, etc.) Similarly, if the patient is discharged from a hospital sooner than anticipated, the patient may be billed for services they never actually received. Many facilities bill the same charges multiple times: one time in an all-inclusive facility charge (ICU, recovery, operating room, etc.); a second time some of the items are charged for separately such as supplies and medication and equipment, and a third time items previously charged in the all-inclusive facility charges and itemized charges may, again, be charged as surgical trays, packs and other pre-made packages. Other factors that contribute to improper billing are human errors (e.g., keystroke errors), complicated billing systems and duplicate billings caused by different departments entering the same medical procedures, items that were used being charged to the wrong patient, etc.
Since the advent of Medicare, in the 1960ies during the Johnson presidency, there have been a series of initiatives by governmental and other payers to control the rising costs of medical care and to counter various “creative” charging practices by facilities and medical providers. The Federal Government and State Governments have primarily tried to control costs through various initiatives that control the payments for services rendered and counter various “creative” charging practices and, to a lesser extent, ration care by not paying for treatments that they consider to be inappropriate or experimental. Insurance companies and other group health payers have adopted a multi-faceted strategy known as managed care. In addition to controlling the prices they pay, under managed care insurance companies use other “managed care” methods including sets of rules that specify, for a given injury, the type of treatments and the quantity of such treatments that the payor will pay.
The Federal Government has adopted various payment protocols that today pay almost entirely according to set schedule of fees for the specific services rendered by different types of providers and facilities. The State Governments, when they regulate the appropriate payment for medical services for worker injured and/or auto accident injured victims, also largely use fee schedules. The very large insurance companies who are providing health insurance largely to employer-sponsored groups, also have adopted fee schedules. These are usually variants of the payment methodology researched and developed by the Federal Government.
The Centers for Medicare and Medicaid Services (CMS) is the Federal agency responsible for the operation and oversight of federally-funded Medicare and Medicaid medical insurance programs. These medical insurance programs handle the medical claims submitted by health care providers, such as doctors, hospitals. The medical insurance programs then reimburse claims that are valid. To stop intentional and unintentional over billing, Medicare has implemented various rules and controls that place an enormous burden upon health care providers to code and bill in accordance with Medicare's stringent and ever-changing rules.
Preferred Provider Organizations (PPOs) are often used by payers which cover smaller numbers of employees and groups. PPOs negotiate discount payment agreements with providers, in return for promising to channel more patients to the provider. PPO agreements typically specify a discount from billed charges or “Usual, Customary & Reasonable” charges.
There is a large and growing number of patients whose payments are not subject to the fee schedule rates mandated by Federal and State governmental authorities nor are they able to access the reduced fees negotiated by large insurance companies.
There has been aggressive pricing and manipulation of charges by providers that disadvantages these patients who are outside one of theses large payor systems. While the large payor systems pay roughly 66% of professional's “Usual, Customary and Reasonable (UCR) charges and around 37% of the UCR charges by facilities, those patients who are outside these systems are being asked to pay 100% of the providers' and facilities' charges.